Securities and Exchange Commission to Investigate Nissan Regarding Ghosn's Pay
The scandal surrounding executive pay is now getting the attention of law enforcement this side of the pond.
Nissan is the subject of an investigation by the Securities and Exchange Commission (SEC), which aims to determine whether the automaker violated securities law by under-reporting executive pay—more specifically, former chairman Carlos Ghosn.
The investigation comes from the SEC's Washington headquarters, a source reportedly told Bloomberg. It allegedly pertains to whether Nissan's self-reported executive compensation was accurate to what it told the SEC, and whether there are safeguards in place to prevent execs from being overpaid. At present, the SEC's probe will remain a civil investigation, not criminal. Commencement of the investigation was reportedly delayed by the prolonged government shutdown, during which federal employees have gone unpaid.
A Nissan spokesperson reportedly confirmed to the publication that it has received an inquiry from the SEC, and that it is complying with the regulator's requests.
The automaker has been embattled with an executive pay scandal following an internal investigation that concluded chairman Carlos Ghosn and board member Greg Kelly were engaging in financial misconduct. Ghosn was dismissed from his positions at Nissan along with its partners Mitsubishi and Renault, and has been in the custody of Japanese authorities—whom Ghosn's wife claims are abusing him—since Nov. 19. He made two bids for bail earlier this month, the second time offering his passport, Nissan stock, and compliance with law enforcement. So far, Ghosn has been denied bail due to being deemed at high risk of flight, in addition to fears that he or his family could tamper with witnesses or destroy evidence.
His alleged accomplice Greg Kelly has been out on bail since Dec. 25. Kelly's attorney Aubrey Harwell Jr. told Bloomberg that Kelly has not been the subject of an SEC subpoena.
There is reportedly debate within the American legal system as to whether the SEC has jurisdiction in this matter, wherein many of the claimed financial crimes occurred in Europe and Japan. The SEC reportedly believes it has jurisdiction, which we speculate to be due to the fact that Kelly—an American citizen—has been implicated as part of criminal investigations abroad.